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DECREE No

DECREE No. 82-CP ON THE 2nd OF AUGUST, 1994 OF THE GOVERNMENT PROMULGATING THE STATUTE ON THE ESTABLISHMENT AND ACTIVITIES OF THE REPRESENTATIVE OFFICES OF FOREIGN ECONOMIC ORGANIZATIONS IN VIETNAM

THE GOVERNMENT

Pursuant to the Law on Organization of the Government on the 30th of September, 1992;

With a view to readjusting State management over the representative offices of foreign economic organizations in Vietnam;

At the proposal of the Minister of Trade;

DECREES:

Article 1.- To issue along with this Decree the Statute on the Establishment and Activities of the Representative Offices of Foreign Economic Organizations in Vietnam.

Article 2.- This Decree replaces Decree No. 382-HDBT on the 5th of November, 1990 of the Council of Ministers and takes effect on the date of its signing. The earlier regulations contrary to this Decree are now annulled.

Article 3.- The ministers, the heads of ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of provinces and cities directly under the Central Government have the responsibility to implement this Decree.

On behalf the Government

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI

STATUTE ON THE ESTABLISHMENT AND ACTIVITIES OF THE REPRESENTATIVE OFFICES OF FOREIGN ECONOMIC ORGANIZATIONS IN VIETNAM

(Issued along with Decree No. 82-CP on the 2nd of August, 1994)

Chapter I

GENERAL RPOVISIONS

Article 1.- The foreign economic organizations which meet the conditions defined in this Statute shall be considered for issuance of a permit to establish a representative office in Vietnam with a view to establishing economic and trade relations with Vietnamese businesses.

Article 2.- Conditions for a foreign economic organization to be considered for the issuance of a permit to establish its representative office in Vietnam:

1. It is set up in conformity with the law of its country.

2. It has operated for no less than five years.

3. It comes up with an investment or trade project which Vietnam is interested in and which is feasible aimed at promoting Vietnam's economic and trade development.

Those foreign economic corporations, which apply for setting up representative offices in Vietnam aimed at carrying out investment projects capitalized at ten million USD and more or at carrying out contracts for importing goods produced or processed in Vietnam, shall enjoy the easing of condition set at Point 2 of this Article and priority in consideration for the issuance of permits.

Article 3.- Scope of activities of the representative office of foreign economic organizations in Vietnam:

- Promoting the building of projects and programs on economic, scientific and technical cooperation which Vietnam is interested in;

- Monitoring and supervising the execution of the economic, trade, scientific and technical contracts signed with Vietnamese businesses in conformity with Vietnamese law;

- It is not allowed to conduct direct business and collect money in Vietnam in any form. The Head of the Representative Office and the staff of the Office are not allowed to sign economic or trade contracts with any Vietnamese businesses unless they have the lawful mandatory letter from the owner of the Company or the Executive Director of the foreign economic organization.

Article 4.- The Ministry of Trade has the responsibility to consider for the issuance, extension, with drawal or cancellation of permits to the foreign economic organizations applying for setting up their representative offices in Vietnam.

Chapter II

PROCEDURES FOR THE ISSUANCE, EXTENSION, SUPPLEMENT AND WITHDRAWAL OF THE OPERATING PERMIT OF THE REPRESENTATIVE OFFICE OF A FOREIGN ECONOMIC ORGANIZATION IN VIETNAM

Article 5.- A foreign economic organization which applies to set up its representative office in Vietnam has to send to the Ministry of Trade (according to the unified form supplied by the Ministry of Trade). The application must be done in two copies, one in Vietnamese and the other in a foreign language of common use.

In addition to the application, the soliciting foreign economic organization must produce the following:

1. The statute or another necessary document testifying to its lawful establishment and operation.

2. A certificate of the Bank or an authorized legal office of the foreign side concerning the prescribed capital of the foreign economic organization.

Article 6.- Within no more than 30 (thirty) days after receiving the full valid file, the Ministry of Trade shall have to make known its answer (to issue or not to issue the permit) to the soliciting foreign economic organization.

Article 7.- The permit must clearly specify the purpose and scope of operation of the Representative Office as defined in Article 3 of this Statute.

A permit is valid for 3 (three) years from the date of issuance and may be extended by three years each time at the request of the foreign economic organization.

Article 8.- Within 90 (ninety) days after the issuance of the permit and within 15 (fifteen) days after extension of the permit the foreign economic organization must complete the procedures of registration for operation at the People's Committee in the province or city where its Representative Office is located.

After issuing the operating license to the Representative Office of the foreign economic organization (according to the unified form issued by the Ministry of Trade), the People's Committee in the province or city shall have to send to the Ministry of Trade a copy of this license in order to monitor and control its implementation.

Article 9.- When the need arises for a foreign economic organization to change its name, its main office or branch offices of its Representative Office from one province to another, or to ask for supplement to its scope of operation or to extend the permit for its Representative Office in Vietnam, it has to ask permission from the Ministry of Trade and may effect its required changes only after having received a document of acceptance.

Within 15 (fifteen) days after receiving the request, the Ministry of Trade shall have to make a written answer to the foreign economic organization about whether or not the Ministry accepts the changes, extension or supplement asked for.

During the time of its operation in Vietnam, whenever the foreign economic organization wants to replace the Head of its Representative Office and/or the staff of the Office, it must report to the People's Committee in the province or city where the representative office is located, and such a replacement can be effected only after it has received a document of acceptance. The time limit for the People's Committee to give a written answer is 15 (fifteen) days after receiving the request of the foreign economic organization.

Article 10.- The operation of the Representative Office of a foreign economic organization shall be terminated in the following cases:

1. End of the term stipulated in the permit;

2. At the request of the foreign economic organization;

3. By decision of the Ministry of Trade to withdraw the permit in case the Representative Office violates the provisions of this Statute.

In the above cases, the Ministry of Trade shall send a written notice to the foreign economic organization and the People's Committee in the province or city where the Representative Office is located 30 (thirty) days before the office terminates its operations.

Article 11.- Within no more than 60 (sixty) days after the Ministry of Trade notifies it to terminate its operation, the Representative Office of the foreign economic organization in Vietnam must return the office, dwelling house and working means it has rented and paid all its debts (if any) to the concerned Vietnamese organizations and individuals.

Chapter III

POWERS AND RESPONSIBILITIES OF THE REPRESENTATIVE OFFICE OF A FOREIGN ECONOMIC ORGANIZATION IN VIETNAM

Article 12.- When it is granted the permit to set up a representative office or is allowed to extend or supplement the permit, the foreign economic organization has to pay a fee set by the Ministry of Finance.

Article 13.- The Representative Office of a foreign economic organization in Vietnam is allowed to operate only according to the purpose, scope and time limit defined in the permit and the license.

Article 14.- The Representative Office of a foreign economic organization in Vietnam is allowed to rent an office, dwelling houses and means in service of its activities and life. It is a allowed to hire Vietnamese citizens to work at the office and must create favorable conditions for these persons to fully accomplish their duties as defined by Vietnamese law on payment of income tax and to purchase the obligatory insurances in Vietnam.

Article 15.- The Representative Office of a foreign economic organization in Vietnam is allowed to pen a spending account (in foreign currencies or in Vietnam Dong originating from incomes in foreign currencies) at the Bank which is set up and operates according to Vietnamese law in order to cover the spending necessary for the operation of the Office.

Article 16.- The Representative Office of a foreign economic organization in Vietnam is allowed to import into Vietnam the materials and utensils necessary for the work and life of the Office and it has to pay tax according to the Law on import and export in force in Vietnam.

Article 17.- The Representative Office of a foreign economic organization must report regularly in writing its activities to the Ministry of Trade and the People's Committee in the province or city where it is located. When necessary and at the request of the above offices, it has the responsibility to report on, supply documents or explain about questions related to its operations.

Article 18.- The Representative Office of a foreign economic organization in Vietnam does not enjoy the Status on the privileges and immunity reserved for foreign diplomatic representations or consulated and representative offices of international organizations based in Vietnam. During its operating period in Vietnam, the Representative Office has the obligation to abide by Vietnamese law and has its legitimate rights and interests protected by the Vietnamese State in conformity with law.

Chapter IV

HANDLING OF VIOLATIONS

Article 19.- Any foreign organization operating in Vietnam like a representative office (i.e. with a liaison office and the working staff...) without a permit from the Ministry of Trade to set up a representative office, shall be forced to wind up its activities and shall be fined 50,000 USD. In serious cases it may be prosecuted according to Vietnamese law.

Article 20.- Any representative office of a foreign economic organization in Vietnam, which violates the regulations listed below, shall receive the following penalties:

1. If it has already got a permit of the Ministry of Trade to set up or extend the permit but fails to register as stipulated at Article 8 of this Statute, it shall be served a warning and fined 2,000 USD. At the same time it has to fill all the procedures for registration as prescribed. A repeat of the violation shall be subjected to double the fine of the first time.

2. If it continues to operate after the termination of the validity of the permit, it shall be forced to terminate its operation and be fined 20,000 USD. In serious cases it may be prosecuted according to Vietnamese law.

3. If it unilaterally changes its name, main office or branch offices before the relevant request is accepted by the Ministry of Trade, it shall be served a warning and fined 2,000 USD. At the same time, it must stop using the new name, main office and branch offices until they are accepted by the Ministry of Trade. A repeat of the violation shall be subjected to double the fine of the first time.

4. If it replaces the Head of the Representative Office and/or the office staff before the request is accepted by the People's Committee in the province or city where the Office is located, it shall be served a warning and fined 2,000 USD, The newly appointed Head of the Representative Office and the new staff are not allowed to engage in official activities. A repeat of the violation shall be subjected to double the fine of the first time.

5. If it rents a house and/or recruit staff members in contravention of prescriptions by Vietnamese law, it shall be served a warning and fined 5,000 USD. A repart of the violation shall be subjected to double the fine of the first time.

6. If it opens and uses an account contrarily to the prescriptions at Article 15 of this Statute, it shall be served a warning and fined 5,000 USD. A repeat of the violation shall be subjected to double the fine of the first time.

7. If the Head of the Representative Office or a staff member signs a contract not within his or their competence, they shall be served a warning and fined 5,000 USD. A repeat of the violation shall be subjected to double this fine. These contracts shall carry not legal value for execution.

8. If the Representative Office conducts its activities outside the limit stipulated in the permit, it shall be suspended for a given period and fined 10,000 USD and must make retroactive payment of taxes as prescribed by Vietnamese law. If it repeats the violation, it shall be forced to wind up its operation and be fined double the amount in the first time.

9. If it does not obey or obstruct the control by the authorized State organs stipulated at Article 21 of this Statute, it shall be served a warning and fined 5,000 USD. A repeat of the violation shall be subjected to double the fine of the first time.

Chapter V

IMPLEMENTATION PROVISIONS

Article 21.-

1. The Ministry of Trade takes the responsibility for exercising unified State administrative management over all activities of the Representative Office of the foreign economic organization in Vietnam. The Ministry also acts as co-ordinator between the Representative Office and the various ministries, services and localities concerned, carry out periodical or sudden inspection (when necessary) of any aspect of the operation of the Representative Office at the proposal of the concerned ministries and services and/or the People's Committee in the province or city where the Representative Office is located, issue decisions on the handling of violations involving up to the suspension or close-down of operation and fines from 10,000 USD upward as prescribed at Article 19 and Article 20 of this Statute.

2. The ministries and services with State management responsibilities along the area or service line have the responsibility to propose, take part in, or conduct jointly with the Ministry of Trade and/or the People's Committee in the province or city where the Representative Office is located, periodical or sudden inspection of the operations of the Office in the area or specialty under its charge, and to suggest to the Ministry of Trade or the People's Committee of the province or city how to handle the violations which come under its jurisdiction as prescribed in Point 1 and Point 3 of this Article.

3. The People's Committee in the province or city where the Representative Office is located takes the responsibility for inspecting and supervising the operations of the Representative Office in their locality. It has the authority to impose penalties below the level authorized for the Ministry of Trade.

Article 22.- This Statute shall not apply to the non-economic Representative Offices of foreign countries set up in Vietnam under international conventions which Vietnam has signed or acceded to. If shall also not apply to the branches or agents of the foreign economic organizations set up and managed according to a separate statute by permission of the Prime Minister.

Article 23.- This Statute takes effect on the date of its signing and replaces the Statute issued along with Decree No. 382-HDBT on the 5th of November 1990 of the Council of Ministers. All the previous regulations of the Government, the ministries, services and local People's Committees contrary to this Statute are now annulled.

Article 24.- The Minister of Trade, the Heads of the concerned ministries and services and the Presidents of the People's Committees of provinces and cities directly under the Central Government have the responsibility to guide and inspect the implementation of this Statute according to their functions, tasks and powers.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI